I had a chat recently with IBM’s Vice President, Product and Strategy for the Enterprise Content Management, Ken Bisconti. We had a great discussion around enterprise paper reduction strategies and IBM’s recently announcedSmart Archive initiative.

Here is a transcription of our conversation:

Tom Raftery:

Hi everyone, and welcome to GreenMonk TV. My guest in the show today is Ken Bisconti. Ken is with IBM, and Ken is the Vice President, Product and Strategy for the Enterprise Content Management Division.

Ken, Enterprise Content Management, that’s basically all the kind of — the papery stuff, all the content that companies create over their lifetime, is that correct?

Ken Bisconti:

Yeah, Enterprise Content Management refers to the management of unstructured content, which comprises about 80% of the world’s business information today. It’s everything from email, and scanned documents, to Compound Document Management, and now archiving content analytics, records management, even case management, business processes; the wide variety of technology with origins back to days of imaging and paper capture.

Tom Raftery:

Okay. Now, I remember back in the 80s people were talking about the onset of the paperless office, and yet, here we are 20 some years later and still there seems to be as much paper as ever. What’s going on? Why aren’t we getting rid of paper?

Ken Bisconti:

Well, about 90% of the world’s content is created digitally. We still find that about half of business information is still sitting in paper today. Much of that is due to the fact that there are business transactions and business to business communication that happens in paper, and from consumers to banks, and from agents to claimants and others, there is a lot of paper traffic that still exists in the world, especially when you think about transactions and the legal requirements around signatures across many different countries or jurisdictions, etcetera.

Tom Raftery:

There is a definite move now away from paper that we are starting to see. Why is that? What are the advantages of digital over paper; I mean paper has worked fine for years?

Ken Bisconti:

It’s a great question. I think that we are now at a point where due to the decreased cost of digital storage and improvements in technology, we are at a point where just the simple storage and retrieval and discovery processes around paper-based business content is not — it is much more cost effective now to take advantage of digital capture.

We at IBM have an effort we call No Paper Weight, which is very focused on helping customers understand the cost of ownership improvement by digitizing their paper records management. Digitizing and automating paper-based business processes. And also using those technologies for not only records management and retention, but also eDiscovery and legal review as well.

Tom Raftery:

Are there other advantages, I mean I can think of environmental advantages for instance, what other kinds of advantages might there be?

Ken Bisconti:

Sure. There is certainly environmental advantages. We have got — I can think of a recent example in one of the county governments in Southern California, where just one simple business process saved them about 1,200 pounds of paper everyday by digitizing that business process. So certainly there are environmental benefits and green benefits to the digitization of paper-based business processes and paper records.

But in addition to that, there are very hard cost savings that customers are able to take advantage of. Often it’s pretty obvious nd our customers, they simply need some assistance in making the cost justification and also understanding how and the best practices to implement some of these policies.

With the digitization of paper you have the advantages of using security technologies, like encryption and access control, to secure who is retrieving and interacting with content that is being stored and managed and part of the business process. And naturally with any digitization and digital storage of information, you have the ability to take advantage of disaster recovery and availability technologies, such as clustering and offline storage. So there are tremendous advantages in security and reliability and availability, not just the cost savings and storage.

Tom Raftery:

You guys made an announcement in October about your Smart Archive initiative. What was that about?

Ken Bisconti:

We did. In October we announced across IBM initiative we call Small Archive. It is focussed on a very holistic view of information life cycle management and information life cycle governance. The basic concept is that we want to provide our customers a consistent way to collect and archive both structured and unstructured content. This ranges from structured information like application archives or application datasets from ERP systems, like SAP and Oracle, using some of our opt-in technology as an example.

It includes email and paper capture and collaborative content from Lotus and SharePoint, chat transcripts, faxes, etcetera. One consistent way that we can collect and archive that content.

We also provide the ability to classify that content based on rules or manual classification, or even an advanced automatic classification technology which uses natural language, linguistic analysis to help identify business content versus non-business content.

We also combine that optionally with records management software and eDiscovery collection and review technology. This is possible using our ECM software.

And one of the components of the Smart Archive strategy is the introduction of new delivery methods. We are introducing a new appliance-based delivery method we call the IBM Information Archive. That will be delivered in the first half of 2010. And through our Global Technology Services Team we are also going to provide these same capabilities in a Smart Cloud offering, an Information Archive Cloud service, which also will be available in the first half of 2010.

I know one recent large retail bank we had in California, 10,000 plus employees, bank with 300 plus branches, they had a single investment in this space that had over 260% returns, and I think their payback was in less that nine months on the overall early investment. They invested maybe three to three-and-a-half million dollars and had returns over a few years of over 30 plus million.

Tom Raftery:

Okay. With any of these new technologies Ken, you are always going to see some verticals going gung-ho and others being a bit more reticent. Are you see seeing that in this as well?

Ken Bisconti:

In this context we tend to find our traditional interest has been in financial services related industries: retail banking, insurance. We have also found that there has been tremendous interest in public sector environments, local and state governments, federal and country level governments.

We have also seen energy in utilities, telecommunications, even retail and manufacturing, but I think that it would be fair to say that traditionally a lot of the interest has existed around financial services, government, and energy utility firms.

Tom Raftery:

So if a company is looking at this and maybe interested in trying to see, is it for them, would they save money? Do you have any kind of a way; someone can model to see if they can save money doing this?

Ken Bisconti:

We do. As I said earlier, we have a program we call No Paper Weight, I’ll provide you with the URL. And you could always search for IBM ECM anywhere on the Internet and you will be directed to our content, which can also guide you to the No Paper Weight initiative, where you will find ROI calculators and white papers, even including case studies of other organizations that have done this before; how they have justified it and some of the fantastic returns that they have gotten from these investments.

Tom Raftery:

Super! Ken, that’s been fantastic. Thanks a million for coming on the show.

The pulp and paper industry is the single largest consumer of water used in industrial activities in OECD countries and is the third greatest industrial greenhouse gas emitter, after the chemical and steel industries (OECD Environmental Outlook, p. 218)

Most of the world’s paper supply, about 71 percent, is not made from timber harvested at tree farms but from forest-harvested timber, from regions with ecologically valuable, biologically diverse habitat. (Toward a Sustainable Paper Cycle: An Independent Study on the Sustainability of the Pulp and Paper Industry, 1996) and

Paper production is an enormous consumer of water, massive producer of greenhouse gases and it contributes significantly to loss of biodiversity.

Apart from that, if I have something in electronic format, I can back it up to the cloud, have it indexed and findable from anywhere with a mobile phone signal. Paper can be damaged in any number of ways or worse, lost.

It always infuriates me then that when I receive my bills for my landline, mobile phone, water, electricity, gas, etc. they are on paper. Why do none of these companies offer me the option of an electronic invoice?

I am reminded of this again because of a conversation I had with Ron Tetteroo of StreamServe yesterday. StreamServe are a company who streamline the billing process for large companies. One of the things things StreamServe can do for companies is help move their customers from paper to electronic billing.

What are the advantages for companies to moving from paper to e-billing? Well, apart from the positive environmental impacts, there is also the cost savings (it is far cheaper to email a bill than to send it in the post obviously). Furthermore, if your bills are delivered electronically, you can include very tailored marketing campaigns for either your own company or partner companies. If you use HTML, you could receive very detailed metrics on your campaign in realtime and even modify it in response to feedback, if necessary. You could, in effect turn the billing process into a line-of-business or revenue generator in its own right!

I asked Ron why then is e-billing not more prevalent.

It is becoming more common, he said but for companies who are not adopting e-billing the reasons can cultural, political or even financial. He gave the example of a company he mentioned e-billing to and they weren’t interested in it because their biggest customer was the post office!

Madness! Companies should be incentivising us to move to electronic billing.

I hung my head.

Still, I want my invoices delivered electronically. I am going to keep pestering the companies I do business with for electronic invoices. If enough of us ask for our bills to be delivered electronically, more companies will do it.

Paper reduction is just not a sexy topic. Virtualising your servers, making your building more energy efficient, or using TelePresence to reduce your carbon footprint – these are big, exciting, engineering projects. How can you compete with that?

Well consider three little known facts:

The pulp and paper industry is the single largest consumer of water used in industrial activities in OECD countries and is the third greatest industrial greenhouse gas emitter, after the chemical and steel industries (OECD Environmental Outlook, p. 218)

Most of the world’s paper supply, about 71 percent, is not made from timber harvested at tree farms but from forest-harvested timber, from regions with ecologically valuable, biologically diverse habitat. (Toward a Sustainable Paper Cycle: An Independent Study on the Sustainability of the Pulp and Paper Industry, 1996) and

Paper production is an enormous consumer of water, massive producer of greenhouse gases and it contributes significantly to loss of biodiversity?

Now paper reduction initiatives should start looking attractive!

What kind of paper reduction initiatives are out there?
There are lots of them and they start with simple initiatives like configuring printers to do double-sided printing by default and also to require people who send print jobs to networked printers to be physically at the printer (using a pin code or swipe code to verify) before it prints to avoid documents being printed and forgotten about. Adobe’s Randy Knox informed me when he gave me a tour of their San Jose HQ that Adobe managed to reduce their paper consumption by 40% simply by defaulting their printers to double-sided printing.

The move to digital printing is also proving hugely beneficial for paper reduction. HP have several offerings in this space. HP’s Forms and Document Automation product [PDF], by enabling on-demand printing, dynamic form creation and electronic distribution, drastically reduces paper use and does away with the costs and environmental impacts associated with warehousing and logistics. While HP’s Output Manager’s ability to manage, distribute and share information can cut down on the need for printed pages by as much as 70%. HP are obviously not the only ones in this space but I am acutely aware of their solutions as they are a GreenMonk client. Also, HP have had a long and successful track record in printing and imaging solutions.

When you think about paper reduction, though you also have to consider the heavy use accountancy systems make of paper. This is a problem companies the likes of billFLO are trying to address. billFLO creates a machine readable invoice which can be emailed alongside a pdf (human-readable) invoice. When the buyer receives the billFLO Invoice they import it into their accounting system with a click and archive the pdf invoice for future reference. This reduces paper use and the likelihood of data entry errors.

When it comes to paper reduction though, few companies have the focus, capabilities or paper reduction potential that GreenMonk’s latest client, StreamServe has. StreamServe’s customers are the telco’s, utilities, insurance companies, etc. – companies who can be easily creating 100m invoices per year and up. One StreamServe customer, Emdeon, was printing and distributing as many as 800,000 paper reports a day. By moving to StreamServe and SAP’s Business Objects, Emdeon has now automated that process and makes the reports available online.

StreamServe also works with their customers to reduce paper output by moving marketing messages from separate inserts accompanying bills to onserts printed directly on invoices reducing the number of pages sent. StreamServe also highlights the benefits of e-invoices to end customers. This typically increases the uptake of e-invoices, reducing the telco/utility’s paper footprint. And when you are talking of companies who print hundreds of thousands of invoices per day, moving customers to e-invoices can have a significant environmental benefit.

What other paper reduction initiatives can you think of? E-books e-paper and audio books are another superb way of reducing paper but I want to leave discussing them for a separate post.